Fly lal: Locus delicti commissi for anticompetitive agreements still has not properly landed.

Time to tackle the judgments left over from the exam queue. I reviewed Bobek AG’s Opinion in C-27/17 flyLAL here. The CJEU held early July.

Pro memoria: the AG’s suggested for locus damni not place of financial loss, rather the place within the markets affected by the competition law infringement where the claimant alleges loss of sales: damage located in a Mozaik fashion in other words; for locus delicti commissi with full jurisdiction, the AG distinguishes between Article 101 TFEU (place of the conclusion of the agreement) and 102 TFEU (place where the predatory prices were offered and applied); finally with respect to (now) Article 7(5), the activities of a branch: offering the fixed prices or otherwise having been instrumental in concluding contracts for services at those prices suffices for that branch to have participated in the tort.

The Court itself,

• for locus damni reminds us of the findings in Marinari (which tempered the implications of Bier), implying that one needs to decide whether loss of income of the kind alleged by flyLAL may be regarded as ‘initial damage’, or whether it constitutes solely consequential financial damage which cannot, in itself, lead to a forum under Article 7(2). The Court, like the AG, opts for Mozaik, referring inter alia to its judgment in Concurrences: each place where the loss of income consisting in loss of sales occurred, that is to say, the place of the market which is affected by that conduct and on which the victim claims to have suffered those losses, opens up partial jurisdiction. As I noted in my review of the Opinion, this interpretation aids the tortfeasor: locus damni leading to shattered jurisdiction facilitates anti-competitive behaviour.
• for locus delicti commissi, under Article 101 TFEU (cartels), with reference to CDC, the CJEU opts for courts for the place in which the agreement was definitively concluded: this truly is extraordinary for it allows for forum shopping by the cartel participants. For Article 102 TFEU (abuse of dominant position)
  • Prima facie at 52 there is one consolation for those suffering anti-competitive behaviour: the Court holds that the event giving rise to the damage in the case of abuse of a dominant position is not based on an agreement, but rather on the implementation of that abuse, that is to say, the acts performed by the dominant undertaking to put the abuse into practice, in particular by offering and applying predatory pricing in the market concerned. That would seem to suggest full jurisdiction for each of those places where the pricing is offered and applied. However in that para 52 the Court does not verbatim links this to jurisdiction: this it does do in
  • Para 53: ‘If it were to be established that the events giving rise to the main proceedings were part of a common strategy intended to oust flyLAL from the market of flights to and from Vilnius Airport and that those events all contributed to giving rise to the damage alleged, it would be for the referring court to identify the event of most importance in implementing such a strategy out of the chain of events at issue in the main proceedings.‘ Courts holding on jurisdiction must not delve too deep into the substance of the case but still have to employ, without looking too deeply at the merits of the case, the lex causae for the anti-competitive behaviour (per Rome II) to identify that event of most importance. In para 54 too the Court emphasises the need to limit the amount of potential jurisdictions (reference here is also made to Universal Music). I cannot be sure: does the combination of paras 52 and 53 suggest that the Court does not accept jurisdiction for all places where the pricing is offered and applied?
• Finally with respect to Article 7(5), the CJEU at 64 holds that the national courts must in particular review whether the activities carried out by the branch included actual acts of offering and applying the predatory pricing alleged and whether such participation in the alleged abuse of a dominant position was sufficiently significant to be regarded as a close link with the dispute in the main proceedings. Separate accounts are not required to conduct that exercise (at 65).

Essentially therefore the Court firmly pulls the Brussels I Recast’s ‘predictability’ card. This is in the interest of companies behaving anti-competitively. I do not read in this judgment a definitive answer however for as I suggested, the combination of paras 52 ff is simply not clear.

Geert.

(Handbook of) EU private international law), 2nd ed. 2016, Chapter 2, Heading 2.2.11.2